W-2 and 1099 deadlines

January 31, 2014

Deadline for employers to mail out Form W-2 to employees and for businesses to furnish Form 1099 statements reporting, among other things, non-employee compensation, bank interest, dividends, and distributions from a retirement plan. For more details, see How to Prepare and Distribute Form 1099-MISC and General Instructions for Certain Information Returns (IRS.gov).

Deadline for self-employed individuals to file and to pay their tax and avoid an penalty for not making your 4th quarter estimated tax payment.

Can I Claim My Son Who Does Not Live With Me Without Form 8332?

Can I Claim My Son Who Does Not Live With Me Without Form 8332?

During my divorce proceedings, I was granted the right to claim my son as a dependent.  I was granted this right despite the fact my ex-wife is the custodial parent.  I went to a national tax shop with a court order in my pocket to have my taxes prepared.  I ran into a problem. My tax preparer stated that he needs the form 8332 to send in with my return.  The form 8332 is a form used to identify that a custodial parent releases custody of a child to a noncustodial parent. I immediately told him that I have a court order to claim my son, and that I am e-filing.   I am not filing by mail.  It should not be a problem.  I have a powerful local court order and that I was going to e-file my return.  He stated that I needed the form 8332 to claim my son.  He said, “Well, it is not a problem, we can fax your wife the form and she can fax it back.” When I get the form, we can e-file your return and I will send in the form 8332 with another form to associate it with your tax return.  He sounded so knowledgeable.  My God, I have a court order.  I called my wife.  She was no chance and she said, “My lost and fat chance.”  I told him that I will be taking my services elsewhere because my wife lip surgery deduction might not be allowed at his tax shop.  Can you help me Mr. Taxman? Is there anything that I can do because I do not want my friends to get a signature for me?  It is my right. I have a court order.

Before you call up your friends to iron things out, it is a good chance that your court order will suffice as a substitute for form 8332. Your order has to state the same things that the form 8332 does plus be signed by your wife.   The court order must state the following to be a substitute.

1.     You can unconditionally claim your son as your dependent,

2.     The other parent will not claim your son as her dependent

3.     The years in which the claim is released

If you have that information, you can send in a copy of the cover page of the court order that includes the custodial parent’s social security number, the pages that include the information above, and a signature page with the custodial parent’s signature and the date of agreement.

My daughter moved in with her kids and I want to claim the kids. Can I do it?

If the child does not provide over half his or her support, the parent has the right to claim their children over all other relatives. However, the parent can grant the grandmother the right to claim his or her child.

I make over 400K how can I benefit from the earned income credit?

If you have a working relative in your household, they might be able to claim you child and benefit from the dependent exemption, earned income credit, and child tax credit.  Here is an example below.


Adam and his wife Dorothy live with their 16-year-old daughter Ann and their 23-year-old son
John in the family house. Adam and Dorothy have AGI in excess of $400,000. Ann is in high
school and does not provide more than 50% of her own support. John is not a full-time student
and earns $15,000 in wages while living in the family home. Adam and Dorothy file a joint
return and are eligible to claim Ann as a qualifying child, but would receive little benefit from
claiming a dependency exemption deduction for her because their AGI is above the phase-out
level.


John can claim Ann as his qualifying child on his return if Adam and Dorothy elect
not to claim her. Ann meets the tests to be treated as John’s qualifying child. If John claims
his sister as a dependent, he will qualify for the $3,800 personal exemption for her, a $1,000
child tax credit because Ann is under age 17, and approximately $2,700 in refundable
earned income credit (EIC). When considering the income tax savings of the dependency
exemption, having John claim Ann’s dependency exemption has saved the family almost
$4,200 in tax.

The important facts in this case are that the older child (John) claiming the younger child
resides in the same household, and the older child cannot be a qualifying child of the
parents if he or she is going to claim a dependency exemption or earned income credit (EIC)
for the younger sibling (IRC Secs. 32(c)(1)(B) and 152(b)(1)). Thus, this strategy worked
because John was not a full-time student under age 24. Also, the older child must have
earned income in order to claim the EIC and the younger child must be under age 17 for the
$1,000 child tax credit to apply.

I can be reached at 404 645 5378.  I can prepare you return virtually.  You can scan your information and I can send you copy of your return by email.  I only ask for you cost to file up front.  Yes, tax software cost money.

Can I claim my kids who I provide the most financial support on my tax return

My name is Bob Richards. I have a valid social security number and I am a US Citizen. Until October of last year, I lived in with my baby mother and our two kids who are under the age of 10. My babies' mother and I never married. She does not work and moved out in October to go live with her new boyfriend. Can I claim our children as my dependents on my tax return? I earned $12,000 last year.

Can Bob Richards who has a valid social security number, earned income, qualified dependents, and earned more than his kid’s mother who resided with him for 10 months claim his children as his dependents on his tax return?

The custodial parent is entitled to claim his or her child for the earned income credit, child tax credit, and the additional child tax credit unless the custodial parent signs a waiver granting a right to the noncustodial parent. The custodial parent is the parent whom the child lived with the most nights. If the child lived with both parents and equal number of nights, the parent that has the higher adjusted gross income is considered the custodial parent.

When the mother and Bob separated in October, she took the children with her. It would seem the kids spent the most nights with her unless Bob has proof of an arrangement that split the visitation and custody evenly. If the mother had the kids the most nights, she is considered the custodial parent for tax purposes and entitled to the tax exemptions. Bob claims that his baby’s mother did not have earned income and therefore she would not have a need to claim the kids. The earned income credit, child tax credit, and additional tax credit are earned income based credits. It would seem that Bob would be the custodial parent and entitled to claim his children as his dependents. However the law states the custodial parent is the parent whom the child lived with the most nights in a year. For Bob to claim the children, the custodial parent must use either Form 8332 or a similar statement (containing the same information required by the form) to make the written declaration to release the exemption to the noncustodial parent. The noncustodial parent must attach a copy of the form or statement to his or her tax return. The exemption can be released for 1 year, for a number of specified years (for example, alternate years), or for all future years, as specified in the agreement.

Soon the Minding Your Business, The Tax Man will wrestle with Bob's baby mother and live in Husband claiming that they were married and claiming his two kids on their joint return. Bob informed the Tax Man that they did not go through the legal process to be married, that Tyrone gave her a cracker jack box ring and pasted tattos that he use to give her when Tyrone and his babies's mother were kids..

Can I claim my disable son is 23 as my dependent?

I am a single disable mother who is a US Citizen and I have a 23 year old Joe, who is disabled. My son and I both have valid Social Security numbers. I earned $600 on the job and I obtained $5000 with a work training program at Easter Seals and they paid me with a 1099. I went to the tax shop because a friend told me that i can obtain a tax refund check from the government, and it will be more than my tax preparation fees because I can claim my son for the Earned Income Credit. Is that true?

Response by Minding Your Business The Tax Man, the Earned Income Credit is based upon several factors as listed below.
1. you must have a valid social security number
2. you must have earned income that cannot exceed certain amounts based upon your filing status
3. your filing status cannot be married filing separately,
4. your dependents must meet age, resident, and income tests

In your case, you are concern whether your 23 year old son qualifies for your dependent to obtain the Earned Income Credit. We must determine if Joe qualifies as being disable. If Joe meets the IRS test for being disable, there is no age limit for claiming the EIC. In order for Joe to qualify as a disable dependent, Joe must not be able to engage in substantial gainful employment because of a mental or physical condition, and a doctor must determine that the condition is expected to last at least a year or til death. Therefore the questions are listed below.

1. Can Joe work?
2. Has a doctor determine if Joe is disabled?
3. Did the doctor identify how long Joe disability will last?
4. Can you get a statement from Joe's doctor?

Immigrants and the Earned Income Credit

My husband is not a citizen. He has a good supervisory job in the USA. We are striving working low to middle income family. My Husband works day and nite to take care of me and our kids and our nephews and nieces. He earned 34,000 and I earned 3,000 in unemployment and a 2,000 working. He has an ID number for work and he has an ITIN. We filed our taxes and we were denied the earned income credit. I was informed that we can receive the Earned Income Credit to assist us with taking care of our 6 dependents in which four are our kids, and the other two his brother's kids. All of them live with us all year. We take care of them and nobody else does. After a tax professional completed our return, he stated that we do not qualify for the earned income credit, the credit that my neighbor informed me that she received and used to purchase a new energy efficient minivan. She spoke to it and it drove us over to the tax shop. The tax preparer informed me that all that i am entitled to is the additional child tax credit. Is this true? What can I do to obtain the EIC? What is the purpose of the ITIN?

Can immigrant workers claim the child tax credit?
Immigrant workers must have either a Social Security number or an Individual Taxpayer Identification Number (ITIN) in order to claim the Child Tax Credit. Workers with a dependent living in Mexico or Canada often obtain ITINs in order to claim an exemption for the dependent on their tax return. However, a dependent child claimed for the CTC must be either a U.S. citizen or a resident alien who lives in the U.S.

I responded ok but what about the Earned income credit? He responded the questions is not simple. He gave me this information in a brochure.

Can immigrant workers get the EITC.

Many legal immigrants who are employed can get the EITC. Previous changes in federal law that denied public benefits such as food stamps and SSI to many legal immigrants did not apply to the EITC. In order to claim the EITC, immigrant workers, their spouses, and children listed on Schedule EITC must each have valid Social Security numbers that permit them to work legally in the United States.

Individual Taxpayer Identification Numbers (ITIN) issued by the IRS to non-citizens and non-work Social Security numbers issued to applicants or recipients of federally funded benefits programs cannot be used to claim the EITC. (Note: An ITIN can be used to claim the Child Tax Credit refund). In addition, an immigrant must be a “resident alien for tax purposes” for the entire tax year to claim the EITC. An immigrant who was a non-resident alien at any time during the year cannot claim the EITC unless he or she:


• was married to a U.S. citizen or a resident alien as of

December 31 of the tax year, and


• files a joint tax return with the spouse and chooses to be

treated as a resident alien for the entire year.

For more information on how resident alien status is determined, see IRS Publication 519, U.S. Tax Guide for Aliens.

Immigrants who are “resident aliens for tax purposes” may be legal permanent residents, meaning they have a “green card” (I-551 card). However, many legal immigrants who do not yet have their “green cards” may still be resident aliens for tax purposes. For example, the following immigrants might qualify for the EITC if they and family members have legal work authorization and Social Security numbers:

• Amnesty temporary residents and amnesty family members

granted “Family Fairness” or “Family Unity” status


• Refugees, asylees and those granted Temporary Protected

Status


• Applicants for these and other immigration statuses who have

legal work authorization and Social Security numbers.

Remember! Immigrant workers’ children must have lived with them in the United States for more than six months of the year to be considered qualifying children for the EITC. Also, the worker’s main home must be in the United States.


All is not lost. Your husband can fill out and submit an I-140 form to the the Department of Homeland security. The cost of the application is $580. Since he is a supervisory and has worked for the same company for more than three years, he qualifies to obtain a valid work social security number.